Month: June 2010

Great information was shared last night at the Real Estate Information Exchange!

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Real Estate Information Exchange news you can use!

 

· Fannie Mae & Freddie Mac have been ordered to delist from the NYSE because they have been trading below $1 for more than 30 days. The delisting will be effective July 8th .

o   They can still post filings w/ the SEC

o   Investors will be able to buy & trade on the over-the-counter bulletin board (I attached a definition)

o   Trading on the over-the-counter bulletin board will cause the trading volume will drop, prices will deteriorate further, price volatility will increase it will become more difficult to trade a large number of stocks

 

·     Housing starts fall

o   Housing starts in May fell 10% from April (but up 7.8% from this time last year)

o   Building permits are down 5.9% from April (but up 4.4% from this time last year)

o   Builder confidence is dropping due to problems with obtaining financing, faulty appraisals, competition from short sales & foreclosures

 

·      Senate approves extension of Tax Credit Closing Deadline because of backlog of closings due to close by June 30th…homebuyers and lenders now have until September 30th to close on their properties!

 

· Bank of America has converted an additional 16,000 homeowners from trial to permanent loan mods this past month….bringing its total to 70,000!

o   HAMP is B of A’s biggest effort and have completed 71k non-HAMP mods so far this year

o   Total delinquency rate (according to Moody’s) among 2005-2008 subprime loans peaked at 54.4% in Jan. 2010 and since then the rate has began to decline and as of April is 51.5%

o   24% of delinquent borrowers in Feb were current in March

o   Expect that 50-70% of permanent mods will eventually default…wow! Because negative equity is such a significant driver of default (the level will depend heavily on the successful implementation of principal forgiveness)

 

· VA Dept of Health recommends denying 2 applications for a Haymarket Hospital – just so you know what is happening in our area…

 

· RIS Social Media conference…lots of good information, you have to leverage social media in your business… it’s the future. If you would like to learn a few tips, set up a time to meet with me!

 

· Josh Burruss of Potomac Mortgage Group briefed us on what’s happening in the mortgage side of things.  New Disclosures! Undisclosed Debt Disclosures and New Debt Acknowledgement at Closing form.  Credit will be pulled for FHA borrowers 3 days prior to closing and these forms have to be signed confirming that no new debt has been incurred during the time period while we wait for closing.  This can hurt a lot of buyers whose credit scores are one or two points away from being in the poorer credit zones. Stay tuned as things seem to change daily.

Why salespeople are successful!

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I recently wrote an article about why agents fail and thought I should counter that article and mention why salespeople are successful.  Here are a few tips to help you know why agents are successful:

· They are continuously prospecting.  When at their kids games, or at the grocery store and any place in between, they are adding people to their database to increase their chances of receiving a referral.

· They can communicate their value proposition to those they meet.  They know why they are in the business and how to let people know, in an informative way of why they should buy or sell and use them as their agent.

· They know the market, stats, and trends and can repeat them quickly and easily.  People love to speak about real estate and if you can be the information provider, you will become a trusted advisor to them and receive more leads.

· They know why today is a good time to buy or sell and can state 3 examples of why this is the case.  People need to know the “real” reasons why now is a good time to buy or sell a house that is factually based and personal to their situation.

· They further their education above and beyond the minimum standards of continuing education.  Agents who earn designations and can communicate why the designation is important to the client earn more money than agents who do not earn a designation. 

· They are continuously networking with business people, previous clients and other industry professionals.  They join BNI, chambers, or start networking groups of their own to increase their databases and get more opportunities for referrals.

· They have a plan and work their plan.  If you don’t have a business plan, develop one today!  Your business plan will give you the direction you need to be successful and give you a daily plan of action to accomplish your goals.

· They utilize social media as a tool to market themselves and their listings and services.  It is a fact – social media is here to stay.  It is time to embrace this phenomenon and get online.  Blog, get on Facebook, Linkedin, Plaxo and reach out to your database to let them know you are in the business and you are successful in it.

· They communicate the value of working with a Realtor and subscribe to the code of ethics.  They are professional and show it through their actions and interactions with others.

· They are results and solution oriented and don’t dwell on the negative situations they encounter.  They look for the educational value or learning experience in each opportunity they face.  Failure is approached as learning experience not a negative one.

· And lastly, they have positive attitudes and attack each day with enthusiasm.  Be an example to others in how you approach situations with optimism and passion and results will follow as they do with other successful people.  Get it?  Got it?  Good!

Be prepared for what might happen…

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We all know that there was a push to get houses under contract by April 30th and settled by June 30th so guess what could happen?  Settlements may get delayed as stress has been put on the system to get these transactions closing on time.  Is your lender on top of your buyer’s loan application?  Have your purchaser’s submitted all of their paperwork to the lender?  Is your appraisal completed?  Has the appraisal been underwritten?  Have you received your commitment yet?  Today is the time to push everyone in the process to move forward and get your sale ready for closing early – be the squeaky wheel. 

Why do you ask are you urged to take action today?  Well, if your settlement is delayed, your buyer may not receive their tax credit they are entitled to receive.  If the settlement gets delayed, who is responsible for making up the difference?  If you are proactive, on top of your transactions and put pressure on the lender to perform…it won’t be you!  If you wait until the last minute to check on your loan and where your loan is in process…the buyers may look at you for a contribution to their lost opportunity.  Begin to have questions today to discuss the potential of the loan not closing and what your lender is going to do to make it right if it doesn’t happen as scheduled.  If you lay it on the line early, you will get the results your clients are looking to receive – an on time settlement!

Potential solutions could be reducing your buyer’s principal amount.  Buying down the interest rate is another possibility.  Paying closing costs for the buyer is another possibility.  When the responsibility is put on the lender early to perform or pay – they will perform more often than not. 

On the flip side of the transaction – a buyer may decide not to close if they don’t receive the credit and potentially walk away from the transaction.  As a listing agent, track your closings closely – you don’t want to get caught off guard!

Be the professional, be on top of the process and avoid problems that may arise and you will be the trusted advisor that gets referrals for taking care of your client.  Get it?  Got it?  Good!

How do you approach failure?

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Failure and how you approach it can lead to more failure or tremendous success.  Are you afraid of failure and as such, rarely risk attempting anything new?  Are you a remedial failure – you fail a few times before you learn something from your experience?  Are you a habitual failure that fails every time you attempt to do something new?  Or do you embrace failure and look for the learning experience each time you do not succeed?

Analyze the last time you failed.  How did it make you feel?  Did you feel upset and distraught?  Did the experience leave you feeling puzzled and curious?  Did the experience make you analyze why you failed and how you could have improved to prevent the same result again? Or did you have an ah ha moment resulting in you knowing exactly what happened and why?  It is critically important to know what happened that lead to your failure and why.  If you tweaked your presentation, asked more questions, spoke with the decision maker, or reworked your numbers would you have won?  Ask for feedback from the client, your peers or mentors to determine how you could improve to gain more achievement.

People who have experienced tremendous failures understand and recognize the importance of what happened so they can grow from the experience and build toward success.  Keep an open mind when you fail – be optimistic that you will find a better way to accomplish your task – learn from you mistake and move on to finding an alternative solution.  Also, build upon the experience of other successful people to learn how they adapted to failure:

Henry Ford Failure Quote:

"Failure is only the opportunity to begin again, only this time more wisely."

~ Henry Ford

 

Thomas Alva Edison Failure Quotation:

"I have not failed. I've just found 10,000 ways that won't work."

~ Thomas Alva Edison

 

Benjamin Disraeli Failure/Success Quote:

"All my successes have been built on my failures."

~ Benjamin Disraeli

 

Sir Winston Churchill Quote on Failures:

"Success is the ability to go from failure to failure without losing your enthusiasm."

~ Sir Winston Churchill

 

Thomas H. Palmer Quote on Failure:

"IF AT FIRST YOU DON'T SUCCEED, TRY, TRY AGAIN. Don't give up too easily; persistence pays off in the end.”      ~Thomas H. Palmer

In addition to this, you must try.  Don’t sit back and wait for something to happen.  Take action, massive action towards your goals and then remember it is imperative that you keep positive, be persistent, move on and concentrate on your next task and don’t lose your enthusiasm to get the results you are looking for out of your efforts.  Get it?  Got it?  Good!

Now, go sell something!

Slow & steady we move along…

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The real estate market is moving steadily along today but with reservation.  As corporations continue to move into our area and the state attracts businesses all over the Commonwealth, we were ranked #7 in the most transient states in the country – pretty impressive for those of us selling houses!  In order to be successful, you have to find the buyers and sellers so get out there and get busy looking – they won’t come to you, you have to go to them!

In addition to this, existing home sales increased 7.6% in April.  This was expected as the home buyer tax credit was set to expire but let’s keep a close eye on this in the coming months and see if the sales momentum continues.  We should be in good shape and should continue to outpace the rest of the country as we continue to create jobs, have affordable housing prices, and interest rates remain low.

Not only did existing home sales increase but so did new home sales!  New home sales rose 14.8% in April – the highest performance in two years!  Be wary however as the pace of new home permits dropped 10.7% in April as well.  We can expect this number to drop next month as a result of fewer permits being issued couple with low builder inventory.

Mortgage interest rates also continue to be a driving force in continued sales.  This week it was reported interest rates are at their lowest level since December as the instability in financial markets overseas have lowered borrowing costs.  If rates continue to stay low, buyers will understand the fundamentals for ownership are strong and will continue buy homes.

Another key to the market continuing to blossom this spring is consumer confidence.  As the economy continues to improve and we ease out of the recession, consumers believe their personal situation is improving and as a result, they are spending again.  As we know, consumers drive the recovery in their “perception” of their situation and not necessarily, reality.

Now, let’s talk about the reservation part of the blog.  Although refinance applications remain strong – they have increased 3 consecutive weeks – purchase applications have continued to decrease and have done so four consecutive weeks.  As a result, purchase applications have dropped to their lowest levels since 1997.  Keep a close eye on this number as it indicates future settlements on home purchases.

Next, is the double dip in home prices that Dave Stevens mentioned at our year end meeting in December.  Two price indices – the dreaded S&P Case-Shiller and the Federal Housing Finance Agency reported housing price decreases in the first quarter.  As we have mentioned, the under $400,000 market and the $800,000 – $1,000,000 market continue to be strong but the inventory priced between $400,000 – $800,000 are still trying to find the bottom and that is where a majority of our houses are priced today.  Couple this with the fact that mortgage delinquency rates have hit 10% – a record.  If these homes go into foreclosure and don’t end up as a HAP sale or a short sale, prices could continue to slide.

Lastly, another monkey wrench that could be thrown into the equation that could affect getting home loans is if Fannie Mae implements the right to pull credit up until the day of closing.  It can have a significant impact on a purchaser’s ability to close on their loan if their credit score goes down by just one point.  As we know, it is monkey see monkey do in the lending arena so others may implement this same strategy to limit the number of defaults in the future.  Stay tuned for further details.

So, what do you do?  Work!  As previously mentioned – people are buying and selling houses here in Northern Virginia – get out there and network.  Create urgency – rates won’t stay this low forever, prices will increase and if you can afford the home today, buy it.  Be a professional Realtor and set yourself apart from others in the industry and you will survive in any market.  Get it?  Got it?  Good!